Dividend paid by most secure stock in the equity market

Assignment Help Financial Management

Reference no: EM131500894

True or False?

1. The risk-free rate is the dividend paid by the by the most secure stock in the equity market.

2. To measure market risk of a stock, the Capital Asset Pricing Model uses the standard deviation of the returns on a stock.

3. One important distinction between equity and debt is that most companies borrow forever, but dividend payments have a limited maturity.

3. A conservative debt policy (a low debt ratio) can be of great comfort when a company suffers an adverse shock.

4. By decreasing the proportion of fixed costs to total costs, and by making products less discretionary, companies can lower their cost of capital.

5. The key advantage of a large portfolio of stocks is that it allows investors to diversify away market risk, but not specific risk.

Reference no: EM131500894

Questions Cloud

Reporting mandates including the sarbanes-oxley act : ow the various types of organizations use different reporting mandates (domestically and internationally) INCLUDING the Sarbanes-Oxley Act.

What is default risk premium on the corporate bond : A Treasury bond that matures in 10 years has a yield of 4.5%. What is the default risk premium on the corporate bond?

Short-term and long-term interest rates were reversed : What would the annual interest and earnings after taxes for conservative and aggressive strategies be if short-term and long-term interest rates were reversed?

Use multistage dividend discount models : In what circumstances is it most appropriate to use multistage dividend discount models rather than constant-growth models?

Dividend paid by most secure stock in the equity market : The risk-free rate is the dividend paid by the by the most secure stock in the equity market.

What is the relative benefit of buying as opposed to leasing : You are considering whether to buy or lease a car. what is the relative benefit of buying as opposed to leasing?

What is the future worth of the equipment : Alpha Electronics can purchase a needed service for $80 per unit. What is the future worth of the equipment if the expected production is 200 units/year?

What is stream of cash flows worth today : If the cost of capital is 9% what is this stream of cash flows worth today?

Estimated rent payments for the lifetime of the device : find the present value of all the estimated rent payments for the lifetime of the device. compare to the present value of buying it outright.

User Account

All Pages